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1 Benchmarking against the Flexible Framework:
Following the principles of sustainable procurement

2 Today’s Agenda 9:20-9:30 Welcome and Introduction 9:30-10:00
‘Navigating the Standards’ 10:00-10:45 ‘Leaders and Learners’ 10:45-11:00 Coffee Break 11:00-11:30 ‘Beyond Gold’ 11:30-12:00 The future of MGPC and Q&A session

3 Today’s Agenda ‘Navigating the Standards’ – An introduction to the benchmarking standards out there, including; The Flexible Framework and the new British Standard for sustainable procurement- BS8903. ‘Leaders’ and ‘Learners’ –  Tell us about the sustainable procurement practices that you are doing well and those areas that you’re struggling with.   An opportunity to learn about the experiences of other delegates. ‘Beyond Gold’ – The Progress Review tool used to benchmark achievements in the Mayor of London’s Green Procurement Code, measures performance up to level 3 of the Flexible Framework.  Are you ready to meet levels 4 and 5? ‘Ask the Expert’ – Delegates will have the opportunity to put questions to the Mayor of London’s Green Procurement Code team.

4 Sustainable procurement: ‘Navigating the principles and standards’
Graham Randles Principal Consultant

5 Standards of Best Practice
Procuring the Future and National Action Plans The Flexible Framework EU Green Public Procurement (GPP) UK Government Buying Standards BS8903 – The new British Standard for Sustainable Procurement Marrakesh Task Force

6 Procuring the future UK Government’s 2005 Sustainable Development Strategy set out the ambitious goal to make the UK a leader in the EU in sustainable procurement by 2009 The strategy suggested the scale of the public sector spend on goods, services, works and utilities was capable of stimulating the market for more sustainable goods and services and that government leadership could shift consumption patterns of business and consumers A task force was set up, led by Sir Neville Sims to devise a National Action Plan to deliver the UK objective

7 Sustainable Procurement Task Force 2006
Concluded that for the UK to become a leader in sustainable procurement an effort was required to mainstream sustainable procurement Sub contracting… UK - Greenpeace allegations: Stolen timber from loggers who plunder rainforests, torture local tribes and rape female workers have been used in the restoration of Nelson's Column in Trafalgar Square. UK - Greenpeace allegations: Stolen timber from loggers who plunder rainforests, torture local tribes and rape female workers have been used in the restoration of Nelson's Column in Trafalgar Square. 28/06/2006 Several inquiries, including reviews by the World Bank and the Papua New Guinea government, found that nearly all of the logging on the world's largest tropical island was illegal.

8 UK Public Sector Initiatives
Sub contracting… UK - Greenpeace allegations: Stolen timber from loggers who plunder rainforests, torture local tribes and rape female workers have been used in the restoration of Nelson's Column in Trafalgar Square. UK - Greenpeace allegations: Stolen timber from loggers who plunder rainforests, torture local tribes and rape female workers have been used in the restoration of Nelson's Column in Trafalgar Square. 28/06/2006 Several inquiries, including reviews by the World Bank and the Papua New Guinea government, found that nearly all of the logging on the world's largest tropical island was illegal.

9 The National Action Plan
Key recommendations for Government: Lead by example Set clear priorities Raise the bar – minimum and forward looking standards should be developed for priority spend areas Build capacity – by developing it’s capabilities to deliver sustainable procurement Remove barriers to sustainable procurement (real and perceived) Capture opportunities for innovation and social benefits

10 The building blocks The Task Force stated that the Action Plan should be supported by 3 building blocks: The Flexible Framework – outlines the actions required to make sustainable procurement happen. Enables organisations to assess the quality of its procurement activity and gives a clear route map to better performance. Prioritisation of spend – a method developed to identify areas of spend to focus attention. 10 priority areas identified. Toolkits – to be produced by a ‘sustainable procurement delivery team’

11 The Flexible Framework
A self assessment mechanism developed by the Sustainable Procurement Task Force Defines an overarching approach to help organisations understand and take steps to improve procurement practice and make sustainable procurement happen The tool allows organisations to measure and monitor their progress on sustainable procurement over time

12 The Flexible Framework

13 Mayor of London’s Green Procurement Code
Progress review part one: Management Gold – 16 signatories Silver – 28 signatories Bronze – 24 signatories Progress review part two: Purchases 13

14 Green Public Procurement (GPP) View from the EU
Commissioner Stavros Dimas: 'The Greening of Public Procurement is a major challenge for Europe's public administrations, but also a major opportunity to boost Europe's competitiveness and stimulate the market for environmental technologies.' The 2005 study Green Public Procurement in Europe, undertaken by the consortium TAKE-5, identified five major obstacles for administrators dealing with public procurement: Perception of financial burden: Higher initial investments and tight budgets are often a first hurdle. Some benefits of sustainable procurement cannot be expressed in monetary terms. Political commitment is necessary to defend long-term and non-financial benefits. Lack of knowledge about the environment and how to develop environmental criteria: This deficit can be overcome by using technical standards and the underlying criteria of certified Eco-labels. Standards are useful in public procurement specifications as they are clear, non-discriminatory and developed on a consensus basis. At European level, they are prepared by the European standards organisations: the European Committee for Standardisation (CEN), the European Committee for Electrotechnical Standardisation (Cenelec) and the European Telecommunications Standards Institute (ETSI) For certain products and services national Eco-labelling criteria or the European equivalent, the Flower, can be applied. These labels take into account the main environmental impact of products and services, are compatible with Internal Market principles, and allow products to be easily identified. Eco-labelling criteria can be applied on the condition that they are appropriate to define the subject matter of the contract. They should also having been established on the basis of scientific information and through wide stakeholder consultation and be accessible to all interested parties. Guidelines for legal advice and green criteria Lack of management support: Senior public sector officials often demonstrate low awareness of the importance of GPP. Without a dedicated strategic focus and an organisational policy strongly promoting GPP – in terms of time and money – the integration of environmental aspects will remain inadequate. Lack of practical tools and information: Communicating, disseminating and providing practical training is extremely important if a country is to increase its GPP quotient. This website aims to contribute to this objective, by providing concrete information and linking to national sources and non-governmental websites. Another important tool is the recently published Handbook on Green Public Procurement which has been translated into all EU languages. Lack of training: Public administrations in general and the relevant purchasing officers in particular often lack the technical and legal expertise to apply sustainable procurement standards. Cooperation across departments and the consultation of external experts from research institutions and NGOs is therefore a crucial success factor. 14

15 European political targets
EC proposes that: By 2010, 50 % of all tendering procedures should be “green” Green means “compliant with endorsed common ‘core’ GPP criteria” Percentage expressed in both number and value of green contracts as compared to the overall number and value of contracts in sectors where ‘core’ GPP criteria have been identified

16 Green Public Procurement
EU definition: « a process whereby public authorities seek to procure goods, services and works with a reduced environmental impact throughout their life cycle when compared to goods, services and works with the same primary function that would otherwise be procured » Environmental criteria can be included in: Technical specifications Selection criteria Award criteria Contract performance clauses The 2005 study Green Public Procurement in Europe, undertaken by the consortium TAKE-5, identified five major obstacles for administrators dealing with public procurement: Perception of financial burden: Higher initial investments and tight budgets are often a first hurdle. Some benefits of sustainable procurement cannot be expressed in monetary terms. Political commitment is necessary to defend long-term and non-financial benefits. Lack of knowledge about the environment and how to develop environmental criteria: This deficit can be overcome by using technical standards and the underlying criteria of certified Eco-labels. Standards are useful in public procurement specifications as they are clear, non-discriminatory and developed on a consensus basis. At European level, they are prepared by the European standards organisations: the European Committee for Standardisation (CEN), the European Committee for Electrotechnical Standardisation (Cenelec) and the European Telecommunications Standards Institute (ETSI) For certain products and services national Eco-labelling criteria or the European equivalent, the Flower, can be applied. These labels take into account the main environmental impact of products and services, are compatible with Internal Market principles, and allow products to be easily identified. Eco-labelling criteria can be applied on the condition that they are appropriate to define the subject matter of the contract. They should also having been established on the basis of scientific information and through wide stakeholder consultation and be accessible to all interested parties. Guidelines for legal advice and green criteria Lack of management support: Senior public sector officials often demonstrate low awareness of the importance of GPP. Without a dedicated strategic focus and an organisational policy strongly promoting GPP – in terms of time and money – the integration of environmental aspects will remain inadequate. Lack of practical tools and information: Communicating, disseminating and providing practical training is extremely important if a country is to increase its GPP quotient. This website aims to contribute to this objective, by providing concrete information and linking to national sources and non-governmental websites. Another important tool is the recently published Handbook on Green Public Procurement which has been translated into all EU languages. Lack of training: Public administrations in general and the relevant purchasing officers in particular often lack the technical and legal expertise to apply sustainable procurement standards. Cooperation across departments and the consultation of external experts from research institutions and NGOs is therefore a crucial success factor. 16

17 GPP Survey – EU “Green 7” Indicator 1: Green contracts by value
Number of green contracts Source: Collection of statistical information on Green Public Procurement in the EU PricewaterhouseCoopers, Significant and Ecofys, January 2009

18 EC Priority Sectors Construction 2. Food and catering services
3. Transport and transport services 4. Energy 5. Office machinery and computers 6. Clothing, uniforms and other textiles 7. Paper and printing services 8. Furniture 9. Cleaning products and services 10. Equipment used in the health sector The 2005 study Green Public Procurement in Europe, undertaken by the consortium TAKE-5, identified five major obstacles for administrators dealing with public procurement: Perception of financial burden: Higher initial investments and tight budgets are often a first hurdle. Some benefits of sustainable procurement cannot be expressed in monetary terms. Political commitment is necessary to defend long-term and non-financial benefits. Lack of knowledge about the environment and how to develop environmental criteria: This deficit can be overcome by using technical standards and the underlying criteria of certified Eco-labels. Standards are useful in public procurement specifications as they are clear, non-discriminatory and developed on a consensus basis. At European level, they are prepared by the European standards organisations: the European Committee for Standardisation (CEN), the European Committee for Electrotechnical Standardisation (Cenelec) and the European Telecommunications Standards Institute (ETSI) For certain products and services national Eco-labelling criteria or the European equivalent, the Flower, can be applied. These labels take into account the main environmental impact of products and services, are compatible with Internal Market principles, and allow products to be easily identified. Eco-labelling criteria can be applied on the condition that they are appropriate to define the subject matter of the contract. They should also having been established on the basis of scientific information and through wide stakeholder consultation and be accessible to all interested parties. Guidelines for legal advice and green criteria Lack of management support: Senior public sector officials often demonstrate low awareness of the importance of GPP. Without a dedicated strategic focus and an organisational policy strongly promoting GPP – in terms of time and money – the integration of environmental aspects will remain inadequate. Lack of practical tools and information: Communicating, disseminating and providing practical training is extremely important if a country is to increase its GPP quotient. This website aims to contribute to this objective, by providing concrete information and linking to national sources and non-governmental websites. Another important tool is the recently published Handbook on Green Public Procurement which has been translated into all EU languages. Lack of training: Public administrations in general and the relevant purchasing officers in particular often lack the technical and legal expertise to apply sustainable procurement standards. Cooperation across departments and the consultation of external experts from research institutions and NGOs is therefore a crucial success factor. 18

19 UK Government Buying Standards (GBS)
Designed to make it easier for government buyers to buy sustainable options. They include: Official specifications that all government buyers must follow when procuring a range of products Information about sustainable procurement and how to apply it when buying Direct links to websites with lists of products that meet the standards The 2005 study Green Public Procurement in Europe, undertaken by the consortium TAKE-5, identified five major obstacles for administrators dealing with public procurement: Perception of financial burden: Higher initial investments and tight budgets are often a first hurdle. Some benefits of sustainable procurement cannot be expressed in monetary terms. Political commitment is necessary to defend long-term and non-financial benefits. Lack of knowledge about the environment and how to develop environmental criteria: This deficit can be overcome by using technical standards and the underlying criteria of certified Eco-labels. Standards are useful in public procurement specifications as they are clear, non-discriminatory and developed on a consensus basis. At European level, they are prepared by the European standards organisations: the European Committee for Standardisation (CEN), the European Committee for Electrotechnical Standardisation (Cenelec) and the European Telecommunications Standards Institute (ETSI) For certain products and services national Eco-labelling criteria or the European equivalent, the Flower, can be applied. These labels take into account the main environmental impact of products and services, are compatible with Internal Market principles, and allow products to be easily identified. Eco-labelling criteria can be applied on the condition that they are appropriate to define the subject matter of the contract. They should also having been established on the basis of scientific information and through wide stakeholder consultation and be accessible to all interested parties. Guidelines for legal advice and green criteria Lack of management support: Senior public sector officials often demonstrate low awareness of the importance of GPP. Without a dedicated strategic focus and an organisational policy strongly promoting GPP – in terms of time and money – the integration of environmental aspects will remain inadequate. Lack of practical tools and information: Communicating, disseminating and providing practical training is extremely important if a country is to increase its GPP quotient. This website aims to contribute to this objective, by providing concrete information and linking to national sources and non-governmental websites. Another important tool is the recently published Handbook on Green Public Procurement which has been translated into all EU languages. Lack of training: Public administrations in general and the relevant purchasing officers in particular often lack the technical and legal expertise to apply sustainable procurement standards. Cooperation across departments and the consultation of external experts from research institutions and NGOs is therefore a crucial success factor. 19

20 UK Government Buying Standards (GBS)
Government Buying Standards simplify sustainable procurement by: Provide minimum and best practice standards for around 50 different products Straightforward specifications that can be inserted directly into tenders Suppliers asked to prove their compliance with these standards Enable more suppliers to develop products that meet the standards – so increasing competitiveness The 2005 study Green Public Procurement in Europe, undertaken by the consortium TAKE-5, identified five major obstacles for administrators dealing with public procurement: Perception of financial burden: Higher initial investments and tight budgets are often a first hurdle. Some benefits of sustainable procurement cannot be expressed in monetary terms. Political commitment is necessary to defend long-term and non-financial benefits. Lack of knowledge about the environment and how to develop environmental criteria: This deficit can be overcome by using technical standards and the underlying criteria of certified Eco-labels. Standards are useful in public procurement specifications as they are clear, non-discriminatory and developed on a consensus basis. At European level, they are prepared by the European standards organisations: the European Committee for Standardisation (CEN), the European Committee for Electrotechnical Standardisation (Cenelec) and the European Telecommunications Standards Institute (ETSI) For certain products and services national Eco-labelling criteria or the European equivalent, the Flower, can be applied. These labels take into account the main environmental impact of products and services, are compatible with Internal Market principles, and allow products to be easily identified. Eco-labelling criteria can be applied on the condition that they are appropriate to define the subject matter of the contract. They should also having been established on the basis of scientific information and through wide stakeholder consultation and be accessible to all interested parties. Guidelines for legal advice and green criteria Lack of management support: Senior public sector officials often demonstrate low awareness of the importance of GPP. Without a dedicated strategic focus and an organisational policy strongly promoting GPP – in terms of time and money – the integration of environmental aspects will remain inadequate. Lack of practical tools and information: Communicating, disseminating and providing practical training is extremely important if a country is to increase its GPP quotient. This website aims to contribute to this objective, by providing concrete information and linking to national sources and non-governmental websites. Another important tool is the recently published Handbook on Green Public Procurement which has been translated into all EU languages. Lack of training: Public administrations in general and the relevant purchasing officers in particular often lack the technical and legal expertise to apply sustainable procurement standards. Cooperation across departments and the consultation of external experts from research institutions and NGOs is therefore a crucial success factor. 20

21 UK Government Buying Standards (GBS)
Government Buying Standards have been endorsed by the Coalition Government All central government departments and their related organisations must ensure that they meet these minimum mandatory specifications when buying products and services The standards have been developed so that products which meet the criteria save more money over their whole life than products that do not The 2005 study Green Public Procurement in Europe, undertaken by the consortium TAKE-5, identified five major obstacles for administrators dealing with public procurement: Perception of financial burden: Higher initial investments and tight budgets are often a first hurdle. Some benefits of sustainable procurement cannot be expressed in monetary terms. Political commitment is necessary to defend long-term and non-financial benefits. Lack of knowledge about the environment and how to develop environmental criteria: This deficit can be overcome by using technical standards and the underlying criteria of certified Eco-labels. Standards are useful in public procurement specifications as they are clear, non-discriminatory and developed on a consensus basis. At European level, they are prepared by the European standards organisations: the European Committee for Standardisation (CEN), the European Committee for Electrotechnical Standardisation (Cenelec) and the European Telecommunications Standards Institute (ETSI) For certain products and services national Eco-labelling criteria or the European equivalent, the Flower, can be applied. These labels take into account the main environmental impact of products and services, are compatible with Internal Market principles, and allow products to be easily identified. Eco-labelling criteria can be applied on the condition that they are appropriate to define the subject matter of the contract. They should also having been established on the basis of scientific information and through wide stakeholder consultation and be accessible to all interested parties. Guidelines for legal advice and green criteria Lack of management support: Senior public sector officials often demonstrate low awareness of the importance of GPP. Without a dedicated strategic focus and an organisational policy strongly promoting GPP – in terms of time and money – the integration of environmental aspects will remain inadequate. Lack of practical tools and information: Communicating, disseminating and providing practical training is extremely important if a country is to increase its GPP quotient. This website aims to contribute to this objective, by providing concrete information and linking to national sources and non-governmental websites. Another important tool is the recently published Handbook on Green Public Procurement which has been translated into all EU languages. Lack of training: Public administrations in general and the relevant purchasing officers in particular often lack the technical and legal expertise to apply sustainable procurement standards. Cooperation across departments and the consultation of external experts from research institutions and NGOs is therefore a crucial success factor. 21

22 Government Buying Standards Statement from Lord Henley
Government Buying Standards have been developed in consultation with procurement officials across Whitehall as well as industry experts and other stakeholders, and rigorously assessed in terms of costs and scientific evidence.” I believe that buying sustainably is buying well and I encourage you all to use these Government Buying Standards developed to help you understand the life cycle impacts of a wide range of products.” The 2005 study Green Public Procurement in Europe, undertaken by the consortium TAKE-5, identified five major obstacles for administrators dealing with public procurement: Perception of financial burden: Higher initial investments and tight budgets are often a first hurdle. Some benefits of sustainable procurement cannot be expressed in monetary terms. Political commitment is necessary to defend long-term and non-financial benefits. Lack of knowledge about the environment and how to develop environmental criteria: This deficit can be overcome by using technical standards and the underlying criteria of certified Eco-labels. Standards are useful in public procurement specifications as they are clear, non-discriminatory and developed on a consensus basis. At European level, they are prepared by the European standards organisations: the European Committee for Standardisation (CEN), the European Committee for Electrotechnical Standardisation (Cenelec) and the European Telecommunications Standards Institute (ETSI) For certain products and services national Eco-labelling criteria or the European equivalent, the Flower, can be applied. These labels take into account the main environmental impact of products and services, are compatible with Internal Market principles, and allow products to be easily identified. Eco-labelling criteria can be applied on the condition that they are appropriate to define the subject matter of the contract. They should also having been established on the basis of scientific information and through wide stakeholder consultation and be accessible to all interested parties. Guidelines for legal advice and green criteria Lack of management support: Senior public sector officials often demonstrate low awareness of the importance of GPP. Without a dedicated strategic focus and an organisational policy strongly promoting GPP – in terms of time and money – the integration of environmental aspects will remain inadequate. Lack of practical tools and information: Communicating, disseminating and providing practical training is extremely important if a country is to increase its GPP quotient. This website aims to contribute to this objective, by providing concrete information and linking to national sources and non-governmental websites. Another important tool is the recently published Handbook on Green Public Procurement which has been translated into all EU languages. Lack of training: Public administrations in general and the relevant purchasing officers in particular often lack the technical and legal expertise to apply sustainable procurement standards. Cooperation across departments and the consultation of external experts from research institutions and NGOs is therefore a crucial success factor. 22

23 BS 8903: 2010 Principles and framework for procuring sustainably. Guide
British Standard with recommendations and guidance on how to adopt and embed sustainable procurement principles and practices across an organization and its supply chains. Provides practical information to help implementation. It also includes guidance on measurement to help organizations assess the extent and effectiveness of their sustainable procurement activity.

24 Procuring sustainably using BS 8903
The principles set out in BS 8903 are applicable to both public and private sector organizations. However, public sector buyers comply with EU Procurement Directives (and the Regulations that implement them in the UK). The EU has requirements with regard to public procurement and what can be considered throughout the qualification, tender and contracting process. It is advisable that proper legal advice always be sought. This guide provides information which is likely to be useful to public procurement but it ought to be read in conjunction with the latest Directives, Regulations and government policy.

25 Procuring sustainably using BS 8903
British Standard gives detailed guidance across all stages of the procurement process and is applicable: to individuals and small and large organizations responsible for commissioning or procuring any form of goods, works or services regardless of sector, for own use, resale or to support service provision across the public sector, private sector and third sector across the whole procurement cycle including one‑time purchases to ongoing contracts with long‑term supplier partners to individuals and organizations with sole responsibility for their purchasing needs and third parties contracted to provide outsourced procurement solutions.

26 Procuring sustainably using BS 8903
Ref BS8903: Principles and Framework for Procuring Sustainably

27 “Enablers” - risk and opportunity assessment
Category level prioritization: mapping risk and spend

28 “Enablers” - risk and opportunity assessment
Buyer approach: mapping risk and scope

29 “Enablers” - risk and opportunity assessment
Market engagement strategy: scope and influence

30 Analysis and action planning
Develop detailed risk/impact assessment Execute action plans Capture results and share learning Source: BS8903 (2010)

31 Sustainable Public Procurement UNEP – Marrakech Process
Source: United Nations, UNEP The Marrakech Process is a global process to support the elaboration of a 10-Year Framework of Programmes (10YFP) on sustainable consumption and production, as called for by the WSSD Johannesburg Plan of Action (2002) In the book “The World is Flat,” Thomas Friedman writes that the supply chain involved in the production of his Dell notebook PC (an Inspiron, like the one I am using to write now) “involved about four hundred companies in North America, Europe, and primarily Asia, but with thirty key players.” For the US market alone, “Six days a week Dell charters a China Airlines 747 out of Taiwan with twenty-five thousand Dell notebooks that weigh altogether 110,000 kilogrammes” (Friedman, T. 2005). The supply chain for my can of coca-cola would have involved bauxite mined in Australia, smelted in Sweden, rolled in either Sweden or Germany and turned into cans at a factory in England. The product itself would have included sugar grown in France, phosphorous mined in Idaho and caffeine from a chemical manufacturer. The cans are shipped from manufacturer to warehouse to bottler, where they are filled and put in cardboard cartons made from forest pulp and shipped again to a regional distribution warehouse and on to the retail outlet, perhaps via another intermediary in between (Hawken, Lovins and Lovins, 1999 after Womack, J. and Jones, D 1996). Objective To promote and support the implementation of public procurement programmes that encourage the uptake of sustainable products and services

32 Sustainable Public Procurement UNEP – Marrakech Process
Key Activities to develop practical guidance and toolkits for sustainable public procurement to carry out research and prepare policy papers on SPP to facilitate dialogue and work amongst stakeholders and countries on SPP to promote SPP through training and assistance The 2005 study Green Public Procurement in Europe, undertaken by the consortium TAKE-5, identified five major obstacles for administrators dealing with public procurement: Perception of financial burden: Higher initial investments and tight budgets are often a first hurdle. Some benefits of sustainable procurement cannot be expressed in monetary terms. Political commitment is necessary to defend long-term and non-financial benefits. Lack of knowledge about the environment and how to develop environmental criteria: This deficit can be overcome by using technical standards and the underlying criteria of certified Eco-labels. Standards are useful in public procurement specifications as they are clear, non-discriminatory and developed on a consensus basis. At European level, they are prepared by the European standards organisations: the European Committee for Standardisation (CEN), the European Committee for Electrotechnical Standardisation (Cenelec) and the European Telecommunications Standards Institute (ETSI) For certain products and services national Eco-labelling criteria or the European equivalent, the Flower, can be applied. These labels take into account the main environmental impact of products and services, are compatible with Internal Market principles, and allow products to be easily identified. Eco-labelling criteria can be applied on the condition that they are appropriate to define the subject matter of the contract. They should also having been established on the basis of scientific information and through wide stakeholder consultation and be accessible to all interested parties. Guidelines for legal advice and green criteria Lack of management support: Senior public sector officials often demonstrate low awareness of the importance of GPP. Without a dedicated strategic focus and an organisational policy strongly promoting GPP – in terms of time and money – the integration of environmental aspects will remain inadequate. Lack of practical tools and information: Communicating, disseminating and providing practical training is extremely important if a country is to increase its GPP quotient. This website aims to contribute to this objective, by providing concrete information and linking to national sources and non-governmental websites. Another important tool is the recently published Handbook on Green Public Procurement which has been translated into all EU languages. Lack of training: Public administrations in general and the relevant purchasing officers in particular often lack the technical and legal expertise to apply sustainable procurement standards. Cooperation across departments and the consultation of external experts from research institutions and NGOs is therefore a crucial success factor. 32

33 ‘Leaders and Learners’
Facilitated workshop

34 ‘Beyond Gold’ Graham Randles Principal Consultant

35 The Flexible Framework

36 The Flexible Framework

37 The Flexible Framework

38 The Flexible Framework

39 Life Cycle Costing (LCC) Achieving win-win outcomes

40 Life Cycle Costing (LCC)
What is Life Cycle Costing? Also called Whole Life Costing (WLC) Technique to establish the total cost of ownership Structured approach that addresses all the elements of cost Can be used to produce a spend profile of the product or service over its anticipated life-span Results can be used to assist management in the decision-making process where there is a choice of options Accuracy of analysis diminishes as it projects further into future most valuable when long term assumptions apply to all options and have the same impact Source: OGC 40

41 Principles of Life Cycle Costing
41

42 Principles of Life Cycle Costing
Acquisition costs - incurred between the decision to proceed with the procurement and the entry of the goods or services to operational use Operational costs - incurred during the operational life of the asset or service End of life costs - associated with the disposal, termination or replacement of the asset or service. In the case of assets, disposal cost can be negative because the asset has a resale value. A purchasing decision normally commits the user to over 95 per cent of the through-life costs. There is very little scope to change the cost of ownership after the item has been delivered. Source: OGC 42

43 Benefits of LCC analysis
Evaluation of competing options in purchasing Improved awareness of total costs - visible costs of any purchase represent only a small proportion of the total cost of ownership More accurate forecasting of cost profiles Performance trade-off against cost Sustainability benefits – reduced waste and CO2 emissions Source: OGC 43

44 Private sector supply chain initiatives
Engaging Suppliers Private sector supply chain initiatives Wal-Mart Will Make Suppliers Say How Much They Pollute Business Insider, 15 July 2009

45 Sustainability Product Index
15 Questions for Suppliers Energy and Climate: Reducing Energy Costs and Greenhouse Gas Emissions Material Efficiency: Reducing Waste and Enhancing Quality Natural Resources: Producing High Quality, Responsibly Sourced Raw Materials People and Community: Ensuring Responsible and Ethical Production The 2005 study Green Public Procurement in Europe, undertaken by the consortium TAKE-5, identified five major obstacles for administrators dealing with public procurement: Perception of financial burden: Higher initial investments and tight budgets are often a first hurdle. Some benefits of sustainable procurement cannot be expressed in monetary terms. Political commitment is necessary to defend long-term and non-financial benefits. Lack of knowledge about the environment and how to develop environmental criteria: This deficit can be overcome by using technical standards and the underlying criteria of certified Eco-labels. Standards are useful in public procurement specifications as they are clear, non-discriminatory and developed on a consensus basis. At European level, they are prepared by the European standards organisations: the European Committee for Standardisation (CEN), the European Committee for Electrotechnical Standardisation (Cenelec) and the European Telecommunications Standards Institute (ETSI) For certain products and services national Eco-labelling criteria or the European equivalent, the Flower, can be applied. These labels take into account the main environmental impact of products and services, are compatible with Internal Market principles, and allow products to be easily identified. Eco-labelling criteria can be applied on the condition that they are appropriate to define the subject matter of the contract. They should also having been established on the basis of scientific information and through wide stakeholder consultation and be accessible to all interested parties. Guidelines for legal advice and green criteria Lack of management support: Senior public sector officials often demonstrate low awareness of the importance of GPP. Without a dedicated strategic focus and an organisational policy strongly promoting GPP – in terms of time and money – the integration of environmental aspects will remain inadequate. Lack of practical tools and information: Communicating, disseminating and providing practical training is extremely important if a country is to increase its GPP quotient. This website aims to contribute to this objective, by providing concrete information and linking to national sources and non-governmental websites. Another important tool is the recently published Handbook on Green Public Procurement which has been translated into all EU languages. Lack of training: Public administrations in general and the relevant purchasing officers in particular often lack the technical and legal expertise to apply sustainable procurement standards. Cooperation across departments and the consultation of external experts from research institutions and NGOs is therefore a crucial success factor. 45

46 The Flexible Framework Measurement & Results
Level 4 Balanced Scorecard approach reflecting input and output Comparison with peer organisations Eg. Green Procurement Code Level 5 Measures used to drive organisational sustainable development strategy Independent audit reports in the public domain

47 GLA Group Responsible Procurement Benchmarking Project – June 2010
Research conducted by Barbara Morton, Sustainable Procurement Ltd & Graham Randles, LRS Consultancy Ltd 47

48 Project objectives Understand how leading organisations approach responsible / sustainable procurement Understand how they measure & report progress Determine what lies ‘beyond Level 5’ of Flexible Framework Establish an RP benchmarking network / community of practice Identification of target group from public and private sector Letter of invitation from Katherine Adams Initial workshop Interview methodology

49 Organisations interviewed
GLA Group: LDA London Fire Brigade Metropolitan Police TfL Central Government: Dept for Transport Dept of Health DWP Arup City of Wakefield MDC Durham County Council IBM Leeds City Council London Borough of Greenwich Skanska Value Wales

50 Risk management - Good practice
GLA Group focus on Mayoral priorities results in strong performance on eg. equality and diversity Robust risk-based methodologies used by leading organisations. eg. DWP focus on high risk contracts DfT prioritisation of categories led to strategy, guidance notes, training in those categories first Wide range of environmental and socio-economic issues considered and tools developed eg. Leeds toolkit, Skanska’s balanced scorecard, MoD scenario planning for future materials scarcity

51 Capability-building & measuring outcomes – Good practice
GLA Group is generally strong on capability-building but, like other organisations, finds it hard to measure impact ‘on the ground’ of capability-building actions Developing consistent metrics across a diverse organisation is a challenge for many interviewed. eg. Skanska, Arup, MoD DfT annual external ‘health check’ of FFW progress Skanska focus on Key Performance Indicators “We’re a business of KPIs”

52 Life cycle costing – Good practice
Most organisations interviewed do some LCC Most commonly used for fleet eg. LFB and buildings eg. Skanska; sometimes IT Clean Vehicles Directive: public sector must monetise & incorporate costs of emissions in purchase decisions Skanska’s “light-bulb moment” - realising we would never dare go to the industry and say you can have a safe project but it will cost you more” GLA has started to investigate existing tools and tools in development. eg. ICLEI LCC tool

53 Engaging suppliers and procuring innovation – Good practice
Proactive approach to identifying requirements as sustainable / responsible in the contract title. eg. “Ultra-efficient” rather than “sustainable” Forward Commitment Procurement. eg. Wakefield’s 3 FCP procurements: current or in the pipeline (ultra-efficient …heating and lighting systems for swimming pools, street lighting and playing pitches) Incorporating sustainability at the design stage eg. Skanska (buildings), MoD (ships)

54 Internal communications and leadership / accountability – Good practice
GLA Group senior management commitment is generally very strong Leading organisations ensure leadership is embedded at all levels and responsibilities are well understood. eg. Skanska’s deep ecological building strategy Clear guidance and accountability. eg. Skanska’s 5 zeros, Leeds’ 5 freedoms Some organisations, including Metropolitan Police and LFB are providing sector level leadership

55 Recommendations – Innovation
Investigate, potentially through market survey or dialogue: Opportunities to convey the responsible procurement requirements through the title / subject matter of the contract Opportunities for Forward Commitment Procurement Earliest possible engagement in the procurement process eg. Design stage

56 Recommendations – Risk management
Tactical: Can learn from others and make rapid progress. eg. carbon footprint of NHS in England Strategic: Review environmental and socio-economic criteria used in risk assessment to focus resources on areas of maximum risk Apply across all procurement spend, category and sub-category levels

57 Recommendations – Capacity building and measurement
Give attention to capability-building at senior management level so that everyone fully understands their roles and responsibilities Work to associate capability building to individual procurement actions and then to responsible outcomes. eg. Progress against carbon target Expand on the work done through MGPC to measure outcomes Work with Defra, WRAP and others to test new methodologies (developing leading practice)

58 Recommendations – Life cycle costing
Further develop LCC approaches and toolkits Identify where LCC approaches are best applied: Bid evaluation; options appraisal; business case Work to investigate which categories of spend might lend themselves to quantification and monetisation of emissions Data could be used to inform resource allocation (budgeting) and procurement decisions (ie. choosing between competing product/service options)

59 Mayor of London’s Green Procurement Code
Thank you! Graham Randles LRS Consultancy tel: Mayor of London’s Green Procurement Code 59

60 ‘Ask the Expert’ Q & A Graham Randles Sarah Griffiths LRS Consultancy

61 Government Buying Standards Statement from Lord Henley
“We are facing tough times in the UK as we define and follow the path to recovery. And now more than ever we need to be thinking about balancing environmental, social and economic needs. What we buy in the public sector is absolutely vital as it affects product markets as well as local economies. Whilst finding cash savings is important in the short term, it also is imperative that what we buy now is cost effective during its lifetime. There is no point buying the cheapest computer on the market if it is not energy efficient. Today’s savings must not be tomorrow’s costs. The 2005 study Green Public Procurement in Europe, undertaken by the consortium TAKE-5, identified five major obstacles for administrators dealing with public procurement: Perception of financial burden: Higher initial investments and tight budgets are often a first hurdle. Some benefits of sustainable procurement cannot be expressed in monetary terms. Political commitment is necessary to defend long-term and non-financial benefits. Lack of knowledge about the environment and how to develop environmental criteria: This deficit can be overcome by using technical standards and the underlying criteria of certified Eco-labels. Standards are useful in public procurement specifications as they are clear, non-discriminatory and developed on a consensus basis. At European level, they are prepared by the European standards organisations: the European Committee for Standardisation (CEN), the European Committee for Electrotechnical Standardisation (Cenelec) and the European Telecommunications Standards Institute (ETSI) For certain products and services national Eco-labelling criteria or the European equivalent, the Flower, can be applied. These labels take into account the main environmental impact of products and services, are compatible with Internal Market principles, and allow products to be easily identified. Eco-labelling criteria can be applied on the condition that they are appropriate to define the subject matter of the contract. They should also having been established on the basis of scientific information and through wide stakeholder consultation and be accessible to all interested parties. Guidelines for legal advice and green criteria Lack of management support: Senior public sector officials often demonstrate low awareness of the importance of GPP. Without a dedicated strategic focus and an organisational policy strongly promoting GPP – in terms of time and money – the integration of environmental aspects will remain inadequate. Lack of practical tools and information: Communicating, disseminating and providing practical training is extremely important if a country is to increase its GPP quotient. This website aims to contribute to this objective, by providing concrete information and linking to national sources and non-governmental websites. Another important tool is the recently published Handbook on Green Public Procurement which has been translated into all EU languages. Lack of training: Public administrations in general and the relevant purchasing officers in particular often lack the technical and legal expertise to apply sustainable procurement standards. Cooperation across departments and the consultation of external experts from research institutions and NGOs is therefore a crucial success factor. 61

62 The business case for sustainability
Prepare for the long game - All the things you currently rely on; energy, supply chain, consumers, investors, regulation – are going to change as a result of increased sustainability risks and concerns Plan to explore how to make sustainability commercially beneficial for your business - innovation KPMG International survey of 378 large and medium-sized companies spread across 61 countries show that 62 percent already have an active sustainability program in place, and 11 percent are currently developing one (Dec 2010) 72 % of those with sustainability programs found that, despite some increase in investment, the benefits clearly outweighed the drawbacks

63 The Green Procurement Code – the future
Proposed elements of the new service for large business members: Benchmarking using Part 1 of the existing Progress Review (up to level 3 of the flexible framework) Bespoke action plan detailing how you can improve your performance Consultancy support time (1 day) to assist with implementing your action plan Networking and Events (3 to 4 per year) Indicative cost - £1,775 (exc VAT) New certification system (soon to be announced!) What do you think?

64 The Green Procurement Code – the future
Proposed elements of the new service for SME members: Benchmarking using the existing Progress Review (up to level 3 of the flexible framework) Bespoke action plan detailing how you can improve your performance Evidence based audit and certification to Bronze, Silver & Gold level Workshops (3 to 4 per year) Indicative cost - £370 (exc VAT) What do you think?


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